Are Millennials Buying Homes, Or Not?

There’s been a bevy of conflicting information and opinion about the millennial generation’s home-buying characteristics. Earlier this summer, they were deemed the generation that isn’t buying homes, and perhaps never will—the generation that’s slowing the housing market.

You can imagine my confusion to see the report last week suggesting that millennials would actually be the generation to save us: by the end of 2015, the group will "become the largest home-buying age group", says Dr. Stan Humphries, chief economist for Zillow. And with 42 percent reporting in a recent survey that they want to purchase a home in the next one to five years, the demographic will certainly impact the market.

There are myriad reasons why the group has shied away from home ownership. According to Lawrence Yun, chief economist of the National Association of REALTORS®, coping with the combination of rising rents and repayment of student loan debt has made saving for a down payment challenging, especially when job opportunities are limited, and wage growth has remained flat since they’ve entered the workforce. For those who have considered buying, low inventory levels in their price range, competition from investors, tight credit conditions, and high mortgage insurance premiums have added to the burden of finding a suitable home.

But recent developments may pave the way for this group and other first-time homebuyers: employment rates are strong, and Fannie Mae and Freddie Mac have loosened some of their underwriting standards, as well as unveiling new 3 percent down-payment programs.

Yes, it appears a sea change is underway for millennials (and other) first-time homebuyers!